Trend following systemEUR/USD

Trend is your frend, everybody knows that. So let`s follow it with system that allows us to catch the biggest part of it.

Rules

EUR/USD daily chart with 30 ema

Ist Mode.Mechanical trend following(almoust)

1. Entry. When the price croses 30 ema and after that next or later going candle breakes the next coming swing with a closed daily candle, open a position.
2. Reverse the position when the price croses the 30ema to the opositte side and then next or later going candle brakes the next coming swing with a closed daily candle.


IInd Mode. Trend following after consolidation

1.ENTRY,- Previous position has to be closed(if we still are in a position we only bother about it when we will exit it), then we wait for consolidation wich comes after clear trend and when the support or resistance of the consolidation is broken with a daily closed candle, thats the trigger.
2.Exit when the price croses 30 ema to the oposite side and then the next or later going candle crosses the nearest swing of the price. After that you have to wait till the next consolidation will come around. Of course there can be a corection before it as well. Sometimes if the market is very consolidating before we get a new trend change it means that we can enter imidiatly together with the Ist mode position and do not wait for any exstra consolidations.Yes it needs some discretion sometimes.


The purpose of mode I and mode II is that if the second mode is employed as well we probably are in a much stronger trend.So it is posible to risk more. But basically I am always in the market either long or short, and the Ist mode is main strategy for trend start and end determination. Everithing in between start and the end of the trend, is where I try to position on the market trying to extract some profits.

Trade management

After the trend change, at the begining of a new trend I will open one bigger position in the begining and be adding a smaller positions almost everiday if market moves in the right direction , after I load up about 50-80 positions I will stop adding becose the longer we are in the trend the higher probability that the trend will start to reverse.But it depends much of the strengh of the trend. And at some moments when market retraces significiantly and there is very close to the swing that needs to be broken (for trend change)I may add even more because anyway if the market change the direction I will close those trades with a not so big aditional loss. But the longer we are in trend the more we should think about preserving the capital not adding so it means I will do it more in the start of the trend. Also when the price meet some strong resistance/support I may close 20-30 persent of the positions and try to reenter at a better price. It do not always work out, thats why I never close all the positions as long as the trend has not changed. I don`t have to be perfect, I just need to follow the trend and be patient not risking too much.
Did I mention that I do not use stops? Anyway I really don`t use them. But you have to use such position size that you will be able to open many positions and live through the fluctuations of the market without total damage of your account.You can also use emergensy stops which would preserve your capital if IIIrd world war would start. I trade only micro lots so far acctually, but with time when adding aditional positions it gets much more explosive, and can bring big profits. But there will be losses and there will be periods of false trend starts, when positions are in some loss or it do not really move anyway can last for months. Can you handle that? If you can you will really be awarded that you will not be able to believe it, it is true. I know the equity will have big fluctuations and the market will take some part of the profit when the trend will be changing, but for me it is the best way simply be able to take bigest part of the trend anyway.And it is a very boring method becose you need only five minutes per day(if you don`t have time) to check the daily chart and either open one additional position, do nothing or close all positions and start a new trend.
Only think that maters here is the trend.

Risk management

Basicly all that we do as a forex traders, - we are managing risk. When we see a good oportunity we open a trade, in oposite if we see that the trade is not working out we may close it. The risk management is especialy important in position trading where trader ads to the exsisting positions or lessens the risk by lowering the overall exposure in the market. Hedging can be a good thing for that. But I am clear that to open a hedge trade is the same as to close same part of the positions, it is just a diferent way but still the same. Anyway not to close the positions lets me concentrate more at the trend. And if I deside to use hedging is just becose it is clearly that the market has chaged the sentiment for a while eventhough the longer term trend is in place. Sometimes it my help to lessen the risk, but it can also `help` to lessen the profit. It may be more usefull at the start of the trend because if the trend is mush longer in play I may prefer to begin to close some or bigger part of the positions in stead of using hedging. Anyway the point is to manage the risk . When I think about what size to trade, it is important to know how long I can allow the market go against me before the trend change, where I will close the positions naturaly, and how it affect my account. Because as long as the trend is in tact all the positions whenever opened are ok as long I do not risk too much.

I'm listening

This system generates few trades especialy the Ist mode but the goul is to make some profits not to trade much for me. This is the last trade I opened last month. The yellow circle marks the candle that crossed the ema and the red one witch crossed the swing low.And that was the trigger for me.Of course it is easy to talk when you see the movement after that, but I promise to update all trades I will make in the future if anyone will be intersted of course.

carry on I will follow you.

ur not following the trend the trend is long

It depends on what time frame you watch, but for me it is a bear market for the IInd mode of my strategy witch is more agresive.And it was confirmed with two bars. First of them crosed the ema and second the swing. If you will make atention there were more false croses of the ema before but I had waited til the swing was crosed.

can you explain method 1 and 11 with some more charts. its still not very clear how you enter and exit

Attachment when I exit position , for the I mode I do not enter emediatly like I do for the II mode. I Wait for consolidation or corection. becose if there was a strong bull trend it can`t just change to bear trend without efort. Usually there will be a period of indesidion and the consolidation is what I wait for . But there are exseption thats why I use two modes.
Here you see consolidation betweem those two lines. The first smaller circle shows exit for previous position and entry for II mode and the bigger circle shows entry for the I mode becose we enter only when support of consolidation was broken.

so basically in II mode, you enter on new candle open once the previous candle has closed below 30 sma. is that all?

what if the price reverses and it was a fake break out?

No that`s not right becose I wait til the swing low/high will be broken after the ema was crosed. I have updated the atachment above.

ok,

this is easier to understand now. so when you mean swing high or low, how do you define it? if going short, is the swing low the most recent low before the highest point was reached? or any low will be swing low.

secondly when we enter the trade on break of swing low, do you want for a new candle after previous candle has broken swing low, or you enter on the current candle?

Yes I use the nearest swing, but sometimes if there are few swings very cloze to each other I will use the farherst.
And I open the order when the candle that broke the swing has closed. I always use closed candles, so it is clear.

lol well you call it a trend following system ,and u showed us in daily.


not only that the % of trend of long against the % of trend of short clearly shows its a long over a time of a period of days.



yes u can view in M1 or M5 and call it bearish on ur bearish candle but still the STRONG trend if long

ur trading breakout of resistance level lol, if u draw straight trend line u can see that.

but hey if it works why not.

You can`t wait til the bear trend will come and then trade it will be too late my frend. And that is what trend following sistems do, they try to catch that new developing trend. You need to follow it.

ur trading reversals.
anyway if it makes u money so yeah doesnt matter.

May be you are right becose I start with a reversal but I keep to the trend all the way til it ends

Nice profits can be made when patience and discipline is used. You should be in nice profit now if traded this str, but still it is early to close the position, thats are rules for. Sometimes you have to give some profit back but only this allow to ride all ,the trend potencialy offers. Becose nobody knows what gonna happen, and if someone says he can ,run away from him as fast as you can.

Now price come over the average(with the gap), but to change direction resistance at 1.3800 stil needs to be broken. So no change in previous position for me. The trend will moust likely to continue going down. But how it will be will see in the future.

If price would manage to come to 1.2600(strong resistance) it is a perfect sell area. If it breaks above it with daily close, it would be time for bulls to show some strengh. But it has to be done first. Just my lonely foughts for some probable future actions where I will step out to try to make some pips on longer term.

missing chart